Israel says its dispute with the United States over its sales of military technology China will soon be worked out. The statement from senior Israeli officials is the first acknowledgment of a major disagreement between Israel and the United States over the issue.

After several days of silence on the issue, Israeli government officials told journalists that Israel is, as one put it, "attentive to American concerns."

Ranaan Gissin, an adviser to Israeli Prime Minister Ariel Sharon, told reporters the issue will be resolved over the next few weeks.

Condoleezza Rice

On Thursday, U.S. Secretary of State Condoleezza Rice said Israel has, "a responsibility to be sensitive" to American concerns. She said U.S. officials have had what she characterized as "difficult" discussions with the Israelis over the technology sales to China. But she said she believes the Israelis now understand the seriousness of the matter.

Washington is increasingly concerned about military modernization in China, fearing this could upset the security balance in Asia and make it more difficult for the United States to help defend Taiwan from a mainland attack.

Secretary Rice said China must not be allowed to undertake a major military escalation before there are assurances that it will be a positive force on the international scene.

According to Israeli media reports, the United States has imposed a series of sanctions on the Israeli arms industry in recent months because of it sales to China. Washington has also suspended cooperation on several projects, frozen delivery of some equipment, and is even refusing to answer telephone calls from Israeli defense officials.

The dispute stems from the Israeli sale of unmanned aircraft technology to China. Israel Aircraft Industries, which is state-owned, sold the aircraft to China in the early 1990s. American officials say some of the parts were shipped back to Israel last year for an upgrade.

Israel says the units were simply undergoing routine maintenance, but Israeli military officials have, nonetheless, stopped work on the aircraft.

Israeli Vice Prime Minister Shimon Peres told Israel Radio Friday that his government is not acting against the interests of the United States and he is certain the problems can be worked out.

U.S. and Israeli officials are preparing for a visit this weekend by Secretary Rice. The secretary is also to meet with senior Palestinian officials during her stay.